PERCEPTION ON FAIR VALUE MEASUREMENT IN GHANA: EVIDENCE FROM ACCOUNT PERSONNEL
Keywords:
Measurement, fair value, perception, Chartered Accountants, GhanaAbstract
The mandatory adoption of the International Financial Reporting Standards (IFRS) in Ghana, increases the use of fair value as a measurement basis for financial reporting. This is a real challenge for preparers of the financial statement, given the standards' emphasis on fair value as measures to improve the true and fair presentation of the financial statements. This study solicited the perception of Accounts personnel on fair value measurement. The study used 200 sampled respondents using purposive sampling methods from Account personnel in different sectors of Ghana's economy. Data was collected from respondents using a well-structured questionnaire. Data was analysed using descriptive statistics with the help of SPSS software. The findings indicated that 72% of Ghanaian account personnel approved fair value over historical cost because it provides useful and accurate information for economic decision making. Though, many respondents were of the view that measuring methods available were not accurate, 60% claim that majority of the assets do not have an active market making it difficult to accurately determine their fair value while 21% were neutral. Furthermore, 52% assert there is lack of skilled and qualified valuers while 60% said there is no strong regulatory body to carry out the valuation and manage the measurement methods. 47% of the respondents indicated that Ghanaian stock markets are young and not efficient; therefore, the cost of shares in most listed companies might not represent the true and fair value of the company’s shares. The results suggest that simply requiring fair value as the reported measure for financial instruments may not improve the quality of information unless appropriate estimation methods or guidance for financial instruments that are not traded in active markets can be established. The study recommends that standard setters must factor the inefficient market of developing market to enhance the efficient application of fair value measurement hence comparability.
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